The truth is that it is not fear of government bankruptcy,
but governments’ determination to balance the books, that is
reducing business confidence by lowering expectations of
employment, incomes, and orders. The problem is not the hole in
the budget; it is the hole in the economy.

And while the real economy may be dragging, that could be just as
much about the loss in stimulus,
as presented by Goldman Sachs today, as it is about the
psychological wounds associated with that absence.

This argument would mean that the loss of stimulus has a knock on
effect on businesses and consumers, which makes them even less
confident in the recovery than they already were, and more likely
to hold back from investing and spending because of it.